Special
Report: Trade Between Developed and Developing
Countries

Developed country subsidies to agriculture. A
specific, and major example of the bias in trade
rules. Developed countries have written the
international trade rules so that developing country
subsidies to their industries are banned, while
developed country subsidies to their agricultural
sectors/farmers, are permitted.

The very great importance of remittances as a source
of foreign exchange for developing countries. The
typical source of foreign exchange for developing
countries and developed countries as well has been
exports. Developing countries have not been able
to generate enough exports, or enough jobs, for all
their people, and many people have migrated to developed
countries, permanently or temporarily. The money
that they send back to their families/countries is
called remittances. These remittances have increased
greatly and are a major source of foreign exchange
for developing countries, permitting them to import
goods.

The bias in trade rules in favor of developed countries
and against developing countries finally provoked a
walkout by developing countries in the September 2003
World Trade Organization meeting in Cancun, Mexico and a
breakdown in international trade negotiations.
Free trade in this article's title is something of a
misnomer--it is free trade only after the rules, and
world economic and political structures, have been
stacked against developing countries.
World Trade Talks Collapse BBC (September
15, 2003)
Walkout Shadows Free Trade's Future Paul Blustein Washington Post,
September 16, 2003. (You will
leave this site and be required to register [once] with
the Post.)

A New Beginning
for the World Trade Organization After CancunMark Ritchie and Kristin Dawkins (Institute for
Agriculture and Trade Policy, October 26, 2003) The
writers are optimistic, because they believe that the
Cancun meetings marked the beginning of real attention
in the WTO to developing country trade issues and
consequently the possibility that trade can bring
benefit to poor countries.

Time to Stop
Dumping on the World's PoorKevin Watkins and
Joachim von Braun (August 29, 2003). An
excellent article which explains how the United States
and other developed countries made promises to reform
their agriculture sector (which would have benefited
developing counties), but did not fulfill these
promises.

"When
the current round of World Trade Organization (WTO)
talks was launched at the end of 2001, northern
governments promised to overhaul agricultural trade
rules—and their own farm policies. That commitment is at
the heart of the so-called Doha "development agenda."
Unfortunately, fine words have been followed by business
as usual."

Brazilians Soured by U.S. Sugar TariffsJohn
Jeter (Washington Post, September 10, 2003.)
(You will leave this site and be required to register
[once] with the Post.) This article clearly
exposes the hypocrisy of the United States in
proclaiming free trade. While proclaiming free trade it
imposes a tariff of 244 percent on sugar imports above a
small quota of duty free sugar imports. Quotas,
incidentally are basically illegal in the WTO, unless,
as the United States does, you have the power to write
ostensibly "neutral" trade rules which favor your
producers and which are completely against any real
notion of free trade. The United States is in favor of
free trade rules for others, not itself, in areas such
as agriculture and textiles, where developing countries
would have some competitive advantage.

While Brazil has both plentiful and fertile land
and available workers, the 244 percent tariff that the
U.S. government levies on sugar imports above
established quotas prevents the Latin American nation
from dramatically expanding its sugar industry and
potentially dominating the American market. So scarce
are jobs here that when a supermarket in Sao Paulo
last week ran a newspaper advertisement for a new
cashier, more than 3,000 people showed up the next day
to apply. "Brazil could easily double its sugar
production almost overnight," said Maurilio Biagi
Filho, president of the Companhia Energetica Santa
Elisa, a sugar mill here that employs 5,000 workers.
We certainly would have no problem finding workers if
the U.S. lifted its tariff on our sugar today."

One
would think that discovering oil and being able to
export it would enable governments in developing
countries to provide sufficient resources for assisting
poor people in that country to have education and health
services and to provide productive employment. NOT!
In fact what HN has described as harmful economic
systems mean that very little gets to poor people. (See
our
section on harmful economic systems for more details
on harmful economic systems.) The following brief
article and link to the full report describe the (mis)use
of oil revenues in developing countries.